Inflation figures from the US and the European Central Bank interest rate meeting will be on the list for next week. At the same time, all eyes will be on the Silicon Valley bank, which went bust on Friday afternoon.
The US central bank interest rate meeting is approaching. In ten days, on March 22, we will have an answer on whether Federal Reserve Chairman Jerome Powell will raise interest rates – and by how much.
On Friday, there were surprisingly strong jobs numbers out of the United States. This is why there is a lot of tension associated with the US inflation figures that will arrive on Tuesday of this week, says Anders Johansen, chief strategist at Danske Bank.
– In the last month, these were somewhat higher than expected. That makes it so important what the numbers show this time around, Johansen says.
Core inflation in the US is expected to ease to 5.5 percent in February, from 5.6 percent last month, according to figures obtained from Trading Economics.
On Friday, the University of Michigan will release the Michigan Consumer Confidence Survey, which measures consumer confidence in the United States.
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– If people are worried about rising inflation, that’s something the Fed is watching, says Johansen.
Friday’s jobs numbers, Michigan consumer sentiment and US inflation numbers will all be very important inputs for the Fed, he says.
Interest rate meeting at the European Central Bank
On Thursday, the stage is set for the European Central Bank (ECB) interest rate meeting.
At the previous interest rate meeting, on February 2, 2023, there was a double jump in interest rates from the European Central Bank. This is the second time in a row that the central bank has raised interest rates by 0.5 percentage point.
Anders Johansen expects the central bank to raise interest rates by 0.5 percentage point for the third time in a row on Thursday. The interest rate will then rise to 3.0 percent.
– It’s very surprising if they don’t, he says.
The ECB has been more than that, Johansen says extremistextremistHooker believes that interest rates must be kept high or raised to control inflation. Recently, because the overall economy has been relatively strong in the past month.
– He says the inflation numbers were stronger than we had hoped.
- In February, price growth in the eurozone was 8.5 percent, compared to the same month in the previous year. In advance, economists expected the inflation rate in countries using the euro to rise to 8.3 percent.
- Core inflation, which excludes energy, food, alcohol and tobacco prices, jumped surprisingly to 5.6 percent in the euro area in February. Economists had expected it to remain at 5.3 percent.
In general, inflation has stopped falling a bit lately. The economies are doing much better than we thought a few months ago. He says the whistle took on a different sound.
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Big Wall Street downturn: Silicon Valley bank shuts down – the bank’s biggest collapse since 2008
– It could have dire consequences for the startup industry
Last week, two banks collapsed in the United States. There was a jolt in the US stock markets, and bank stocks in both the US and Europe fell after the news of the banking crisis.
Danske Bank’s chief strategist is excited about what will happen next and what steps the US authorities will take. It is believed that the collapse of the bank will dominate the next week.
– Johansen says that what is happening in the banking sector in the United States will steal attention.
On Friday, a US hedge fund adopted Silicon Valley Bank (SVB) after it faced a liquidity crunch as a result of customers withdrawing their money from the bank faster than it could manage.
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SVB was the 17th largest bank in the United States, and the collapse was the largest since the financial crisis. The Guarantee Fund controlled approximately $175 billion in customer deposits, which is equivalent to NOK 1,867 billion.
Many of SVB’s clients were small and medium-sized companies and some large technology companies. Johansen believes that more start-ups will emerge that will struggle as a result of bank failures.
It will be interesting to see the companies that got banked, and what happens to the companies that get back less than they got, he says.
– This could have serious consequences for the startup industry in the USA.
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